Dollar-value LIFO retail
Response to the following problem:
Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2016. On that date, the cost of the inventory on hand was $15,000 and its retail value was $18,750. Information for 2016 and 2017 is as follows:
Date
|
Ending Inventory at Retail |
Retail Price Index
|
Cost-to-Retail Percentage |
|
12/31/16
|
$25,000
|
1.25
|
82%
|
|
12/31/17
|
28,600
|
1,30
|
85
|
Required:
1. What is the cost-to-retail percentage for the inventory on hand at 1/1/16?
2. Calculate the inventory value at the end of 2016 and 2017 using the dollar-value LIFO retail method